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Maya on Money is a collection of articles by financial journalist Maya Fisher-French; contributions from other authors and questions posted by readers. We encourage readers to post questions and add comments to create an interactive forum where people can gain information on how to better manage their money.

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How to make a difficult decision

Managing our finances involves a lot of tough decisions and we often put off making those decisions because they seem so overwhelming. But often, it’s the procrastination that can end up costing more than making a non-optimal decision. So here are some tips to help you with the decision-making process.

Have you ever spent nights lying awake, agonising over a decision? A decision that could have a long-lasting effect on your life, the life of those nearest to you or your organisation?

Such a decision need not hold you hostage, says Dr Salome van Coller-Peter, executive coach and programme head of the MPhil in management coaching programme at the University of Stellenbosch Business School (USB).

She says there are several factors that influence our decision-making – factors which make it feel at times like an almost impossible task. “Past experiences, fear of making a mistake, your age and financial position, your personal beliefs as well as who your decision will affect, are all significant factors. They are the reason you spend considerable mental energy and time weighing up the various options, scenarios and outcomes. This can leave you exhausted, confused and even unable to make that all-important decision.”

Dr van Coller-Peter says by adapting certain strategies of logical thought and combining these with your intuition, which is much more powerful than you think, you can significantly ease the transition to action.

STEP 1

She advises to start by viewing the decision as part of your life as a whole. “It is very important not to view your decision in isolation and getting caught up in the moment. Take a step back and see how this decision will impact your or your organisation’s current situation and long-term goals so as to come to a basic understanding of not only how this decision will affect the current issue you are dealing with, but also the future.”

STEP 2

The second factor to consider is your values. “Values are those things that you deem important in the way you live and work. Life is much simpler when you acknowledge your values when you plan and make decisions. They determine your priorities, give you peace, reinforce who you are and measure whether your life is turning out the way you want it to.”

However, she says, it’s important not to try to live someone else’s life and follow their way of thinking. “Make sure you include your intuition or inner-voice in your decision-making and you will be far happier with the outcome than when you rely only on logical thought, which is often influenced more by the world around you than you realise.”

STEP 3

The third step is using what she calls the “decision matrix analysis”. This involves identifying all the important aspects of the decision and then creating a document where you evaluate each on merit.

Let’s say you want to buy a new house which will satisfy the needs of all the members of your family in terms of space and location, while also being affordable. With several such houses available, the question is which one to choose. Create a document with two columns: in the first column, list the properties available; in the second column, write down the criteria they have to conform to. Give scores of 1 to 3 with 1 being the least suitable and 3 the most suitable to your needs. Then multiply the score with the relative importance of each factor and arrive at a total for each option. The house which scores the highest will in all probability be the best choice in terms of your needs.

STEP 4

Dr van Coller-Peter says the fourth step in decision-making is gaining knowledge by researching how other people have dealt with and been affected by a similar situation. “It is sometimes comforting to know that someone else also arrived at the same crossroads as you have and to see how they have responded to the situation.

“However, it’s important to remember that although the problem might seem similar, circumstances vary greatly from one person to the next and that what worked for one does not necessarily work for the next person. So rather see it as an information-gathering exercise where you gain knowledge, understanding and insight which you can then interpret to fit your unique situation and values.”

STEP 5

Now you have the opportunity in the second-last step to make a list of your options and then to discuss these with your partner, family or those in your life or organisation that will be affected by the decision. “Their suggestions might offer some clear insight as well as alternatives that you might not have considered.”

FINAL STEP

Once you’ve included the feedback and suggestions, evaluate each option and take the all important final step: make a decision ‒ and stick to it!

Dr van Coller-Peter does warn that after making a decision, different people experience a variety of reactions. “These can range from relief and excitement to regret and disappointment. The key is to understand these emotions, as they will either be a major barrier or catalyst when next you’re faced with a difficult decision.”

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While we hope the information provided on this site will be useful in making financial decisions it is not to be viewed as advice. If you require financial advice you need to contact a registered financial advisor.